Description: Friend recently in Berlin reported two-hour talk with [Hjalmar] Schacht; Schacht feels situation hopeless unless Germany gets help from England and U.S.; Hitler, told no possibility of relief from outside unless Germany changes her external and internal policies, remarked, "All this does not interest me"; German friend pessimistic; two children of former marriage recently visited him and showed evidence of Nazi training; Hitler's throat affection apparently not malignant, but general mental and physical condition poor, and much talk about successor; German consumption of Champagne increasing; new middle class considers champagne a status symbol; friend reported Goebbels supplied money to finance "Croix de Feu" in Paris; [Emil George] von Stauss mentioned as successor to [Hans] Luther as Ambassador to U.S.; von Stauss unscrupulous instrument of regime; pro-Italian attitude of [James L.] Garvin of the Observer may be influence of daughter in Italy, who is confirmed Fascist; London Times editorial gives correct estimate of German decree defining status of Army in case of internal trouble; does not mean Army has gone over to regime, but that it has won another victory over the Party; no real sentiment in Austria for restoration of monarchy, but Austrians resent Czech objections; in old Empire Czechs considered a secondary population; Hungary playing dog-in-the-manger policy; trying to counteract growing good feeling between Austria, Czechoslovakia, and Yugoslavia; [Julius] Goemboes would probably be replaced as Prime Minister if he had a likely successor; has read [Breckinridge] Long's telegrams from Rome; Long seems concerned that further isolation of Germany and Italy may force alliance between the two; Germany has most to lose by alliance and not likely to ally herself with partner so weak and near breaking point as Italy; Germany still hoping time will work in her favor; believes powers should accept Russian cooperation in guaranteeing Austrian independence, even though cooperation is offered for selfish reasons; England has had fill of agreements with Germany since Naval pact has already been violated; way now open for closer cooperation between London and Paris; disappointed in John Bassett Moore's comments on neutrality matter; in recent years he has lived in retirement and has little knowledge of forces at work in Europe, but his word still carries weight.